As one analyst said today, Amazon is the mirror image of Apple. Apple, a device maker, has low-priced content to encourage you to buy devices. Amazon, a content provider, has low-priced devices to encourage you to buy content.

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I know, without doing much websearching, that the Amazon announcement has struck fear into the hearts of traditional publishing. Traditional publishing still hasn’t figured out how to make money on e-books, and traditional publishers are doing their best to piss off readers.

Even Mike Shatzkin, whom many in traditional publishing consider the guru of the e-publishing world, doesn’t completely understand the importance of readers. I usually don’t recommend his blog because, although he often has good stuff, he’s so entrenched in traditional-publishing think that his blogs are only about 50% useful for the way that publishing is going—and I don’t want to explain which 50% of what article is worth your time.

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Shatzkin is the guy that traditional publishers listen to. Remember, as you read his work that he’s a traditional publishing guy writing for traditional publishers. He’s not writing for professional writers, like I am. That makes a lot in his various blog posts irrelevant to us (or just plain offensive). I am pointing it out to you in this case because I want you to see how traditional publishers—even forward-looking folk—think.

Witness: “We know that agents and authors will accept an e-book royalty rate of 25% of net receipts in today’s environment, where 70% or more of the sales are still made in print. We don’t know if the threat of the alternate publishing options will force the royalty rate up if sales fall below 50% print or 30% print.”

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What Shatzkin and his ilk don’t recognize are the professional writers who have decided that 25% of net is a ridiculous number, writers who have decided that we’re not even going to offer our books to any traditional publisher who wants to give us no more than 25% of net as a deal breaker. Some authors are fighting this, but most are simply walking away.

The writers who remain either don’t realize they have options or are operating in a fear-based way . . .

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“We don’t know if book publishers can develop ‘e-book publishing expertise’ that will convince writers to abandon the direct-to-consumer marketing through the internet and let book publishers continue to publish e-books.”

That’s a fact, folks. And the facts are why publishing professionals love Shatzkin’s blog. But beneath all of that factual business language is sheer terror. Because if traditional publishers can’t convince writers to return to the traditional publishing fold, then what will happen to traditional publishers?

They will become insignificant—or at least, less significant than they are now.

It’s rather astonishing to me that the traditional publishing guru of e-publishing ignores the trends among the indies. Right now, indie publishers and self-publishing writers are way ahead of traditional publishers—on e-book design, on pricing, on marketing, and on distribution.

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Indie authors are selling illustrated children’s books at good New York numbers. For example, Rebecca Shelley has sold thousands of e-books per month of her illustrated middle grade Bees in My Butt since Christmas, on Nook alone, a platform that favors illustrations. She doesn’t have the figures for the same period from her iBookstore sales, but she’s convinced her sales will increase this Christmas because of the iPad. (I’m sure the Kindle Fire will help her here as well.)

She is not alone. There are a lot of successful children’s writers, and a lot of successful illustrated books, many of them indie-published. As Rebecca and I exchanged e-mails tonight (with me asking to use her name so I could promote her work), she mentioned this:

“Up to this point, all of my illustrations have been black and white. But the Nook color has the most amazing interactive children’s picture books. You turn the Nook sideways and it gives the full picture book double-page layout. Plus it has a read-to-me feature, that reads the book to the children as they turn the pages. Every child (even the older ones) that I’ve shown these Nook picture books to has gone crazy over them.”

The advice that Shatzkin gives here shows both the fear and the arrogance of traditional publishing. Stick to print books until we know there’s a market. But of course, they’re not looking at the self- or indie-published titles, so how does traditional publishing know whether there’s a market or not? And somehow Shatzkin and others are ignoring things like the Nook picture books—because…why? I have no idea.

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Over the weekend, I saw Moneyball with Brad Pitt (based on Michael Lewis’s book, which I really need to read). Moneyball is less of a sports movie than a business movie, and there’s this marvelous sequence in the early part of the film. Pitt’s character has decided to use a statistical analysis to “buy” cheaper players to round out his roster, a job traditionally reserved to the baseball scouts.

A scout, knowing that he is about to lose his job, gives Pitt the Speech: We scouts know how players work, we find the talent, you won’t have a team without us, we have history and arcane knowledge that you (puny human) could never ever know…

Of course, in the sequence of the movie, we come to realize that the scout is wrong. That his arcane knowledge is as useful to baseball as alchemy is to physics.

The thing is, as the scout gave that speech, I was laughing so hard I nearly hurt myself. Make the scout a traditional book publisher. Make Pitt a reader. You have read a version of “The Speech” all over the internet—you readers won’t survive without traditional publishing, because you won’t know the good from the bad.

But here’s the thing: traditional publishing has forgotten that they’re in the market of pleasing their audience—and their audience is readers, who don’t care if they buy a book from Bantam or directly from Rebecca Shelley, so long as that book is good. If the book is good (and trust me, Bees in My Butt is good), then the readers will buy the next Rebecca Shelley book, whether it is published by Rebecca Shelley or by Bantam Books.

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Shatzkin ignores the real threat to the number of books on shelves. The way that Barnes & Noble has decreased the books it carries, replacing them with toys, and games, and scented candles (Yep, even scented candles). A number of B&N employees are furious about this. As one wrote to me a few weeks ago, “I got hired to sell books. Now I sell ‘book-related merchandise.’” A B&N manager went further, sending me photographs of the interior of the store as this change from bookshelves to toy shelves is occurring. The manager wrote, “Anyone who tells you that B&N’s [brick-and-mortar] stores will carry the same number of books as before is lying.”

B&N isn’t the only brick-and-mortar bookstore to abandon books. Indigo Books and Music has been Canada’s largest chain bookstore since the merger with Chapters in 2001. In addition to trying an e-book model through Kobo, Indigo is also diversifying the productsin its brick-and-mortar stores. Indigo will offer its own line of “home décor and lifestyle products” because, clearly, there aren’t enough stores in Canada offering that sort of thing. (Okay, everything after “clearly” is my personal opinion. But jeez, how stupid is this?)

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The problem is that all the old markets are going away. Yeah, the Publishers Weekly article on Indigo ended with a vaguely hopeful note: “But if Indigo has less space for books and less time* on the shelves to sell them, one…possible silver lining is that it might present opportunities for independent booksellers.” Exactly the conclusion I had about B&N several months ago.

Still, that’s all traditional publishing sees. If they can’t market books to bookstores and to some discounters, like Wal-Mart, where can they market books? And if they can’t see where to market books, if they can’t figure out how to find new places to do so, places that are fairly obvious if you just look around (depending on your product), then they’re of no use to the “content-creating brands”…um…I mean the writers.

And deep down, the traditional publishers know that. It makes them afraid.

And they are afraid. Just the fact that Shatzkin mentions the 25% of net as something that “agents and authors” might not accept in the future means that traditional publishing knows the deal is a bad one for us “content-creating brands.” The publishers are worried that we’ll figure it out, just like they’re worried about their entire industry.

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Fear, fear, fear.

As the fear trickles from the publisher to the agent, imagine how the traditional writer feels. The writer who doesn’t want anything to do with indie publishing, who sees self-publishing as something horrible. Those writers are only hearing about the fear from their traditional publishers and agents. As a result, these uninformed writers believe that “publishing” is collapsing, when in reality, it is the old business model that is failing.

Because the writers are afraid that publishing is collapsing, they’re grabbing onto whatever gets thrown their way, no matter how bad it is.

These are the writers (for the most part) that Shatzkin and his friends are doing business with. The writers who have no idea that next to the sinking Titanic are small yachts available to any writer who will leap from the Titanic’s deck to the waiting yacht.